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Fire & Water - Cleanup & Restoration

Mold Damage 101: What Business Owners Need To Know

7/22/2021 (Permalink)

White wall covered with mold infestation Mold damage in Rocky Hill, TN property.

What Business Owners Should Know About Mold Damage

Mold is a four-letter word for both business property owners and commercial insurance providers. A combination of heat and moisture can spark the invasion of fungi, which can grow on and eventually destroy almost any building material. Tearing down, cleaning up and rebuilding after such an event in Rocky Hill, TN, can cost thousands of dollars. As a business owner, it is important for you to know just how much protection your insurance affords—and what actions you should take to ensure your claims are paid.

Exclusions and Exceptions

A flurry of lawsuits in the 1990s prompted commercial insurance companies to add a standard fungus exclusion clause denying coverage of damage and/or replacement costs due to mold. However, exceptions exist which do permit some coverage:

  • Fungus caused by fire
  • Fungus caused by lightning
  • Fungus triggered by a specified cause or loss (other than by fire or lightning)

Known as Limited Fungus Coverage – basically mold insurance – it is the third exception that provides the most common form of compensation. It is important to read the “specified cause or loss” definition in your policy, but two events generally are included as exceptions: water damage and leakage from an interior sprinkler system. (Note: Water damage from floods is not usually covered unless the policy includes a flood endorsement.)

Initial Steps

Once a fungus issue has been identified, it is vital to take immediate action. Call a restoration specialist in Rocky Hill, TN, for an inspection and assessment. Insurance providers often demand proof that you have made a concerted effort to secure the property before agreeing to pay claims.


Most policies provide up to $15,000 in coverage per specific event (with one event annually). Coverage includes costs for the following:

  • Removal of damaged material
  • Replacement of damaged material
  • Testing or inspection after treatment

Understand what to do and just what protection your commercial insurance policy provides. Doing so can make dealing with mold damage a less stressful process.

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